India's pharma exports to US surged in March amid tariff concerns

India's pharma exports saw a significant rise in March, driven by fears of impending US tariffs. Industry experts anticipate impact of potential reciprocal tariffs on India's future export strategy

India’s pharma exports to the United States (US) in March surged almost 74 per cent $1.561 billion, with this coming at a time when talks on potential US tariffs were getting louder, the data from the Pharmaceutical Exports Promotion Council (Pharmexcil) showed.

 

Export growth in March over February was around 71 per cent.

 

Speaking to Business Standard, Namit Joshi, chairman, Pharmexcil, said the situation was “dynamic” and trade, particularly with the US, had been influenced by tariff concerns.

 

The data showed in April exports to the US fell 7.27 per cent to $898.34 million as against $968.79 million in the same month last year.

 

In May, however, there was a recovery, growing 13.34 per cent to $813.41 million.

 

If the April and May figures are combined, export growth to the US was 3 per cent.

 

Tariffs on imports from India were expected to come into force by April, but the decision was delayed. India and the US are yet to announce an interim trade deal, and US President Donald Trump indicated earlier this week that they would start sending tariff letters to countries soon. 

 

Joshi said the surge in export was anticipated owing to Indian exporters offloading material in anticipation of tariff matters.

 

In March, overall pharmaceutical exports from India grew in double digits, touching about $3.67 billion (up 31 per cent year-on-year).

 

Exports to Canada grew 29.6 per cent while shipments to some countries in Latin America also went up.

 

A Mumbai-based analyst said because of tariff uncertainties, several companies advanced their shipments.

 

“This is done so that they can get the time to negotiate with buyers in the US in case a tariff is imposed,” the analyst said, adding that the June data too might show a surge because of the tariff scare in July.

 

The US is the largest market as far as Indian pharma exports go. It accounted for 34.51 per cent of the country’s pharma exports. India exported pharma products worth $10.515 billion to the US in FY25, growing by 20.43 per cent. In FY24 exports to the US had grown by 15.69 per cent.

 

In FY25 India’s overall pharma exports grew 9.4 per cent to $30.466.85 billion.

 

Joshi said there was considerable deliberation on export to the US now.

 

“The tariff situation has made exporters cautious. Discussion has centred on the potential need to shift focus to more complex generics, biologics, and biosimilars to stay competitive. The US market remains the largest destination for Indian exports, but tariffs and pricing pressures have led to a more cautious approach,” he said.

 

For the US market, India is focused on simple generics. There it faces competition but also benefits from high demand. However, the biologics and biosimilars sector is still emerging for India.

 

“This creates an opportunity for growth, but also a need to address complex manufacturing challenges,” he said, adding that simple generics would be more than 80 per cent of total export.

 

“Biologics, including biosimilars, are expected to face more scrutiny under the new tariff regime. The US wants to limit the import of expensive biologics, which are being purchased at exorbitant prices. However, India’s strength lies in simple generics, and we don’t foresee significant impacts on this segment, even with the tariff challenges,” Joshi said.

 

The industry, however, says if reciprocal tariffs are imposed by the US, it could give India some leverage. “India’s medicine exports to the US are worth about $10.5 billion while importing around $833 million. This imbalance puts India in a strong position to negotiate reciprocal tariff agreements, potentially reducing the impact of new tariffs on Indian exports. The focus would remain on safeguarding India’s simple generic market, which is less likely to be affected by tariff hikes,” Joshi said.

 

Earlier the Indian Pharmaceutical Alliance (IPA) asked the Centre to consider making the duty on pharma drug imports from the US nil. This would, in turn, ensure that no reciprocal tariff could be imposed by the US. 

 

“Almost 50 per cent of imports fall in categories that do not attract any duty. The rest attracts 5-10 per cent. If we make this zero, then any reciprocal tariff that the US imposes also becomes zero,” said a senior industry veteran who was part of the team that met government officials.

 

India accounted for 47 per cent of the generic medicine supply to the US, and was the largest supplier of affordable generic medicines.

 

Industry insiders said even from the US standpoint levying a duty on Indian drugs did not make much sense because it would raise the cost of health care in the country. The US imports drugs worth $200 billion from Europe. But India has the largest share in volumes.

 

Meanwhile, India has started focusing on other markets. “Regions like West Asia and North Africa (called the Middle East and North Africa), and the United Kingdom have been performing well for India. These regions are seen as emerging markets for pharmaceutical exports. However, the growing geopolitical challenges make it difficult to make long-term predictions. It’s critical to develop markets like Africa, where Indian exports are becoming increasingly significant, especially for certain products,” Joshi said.

 

He added that the Centre, particularly the Ministry of Commerce, was engaging with the industry to address the challenges posed by geopolitical instability. The focus is on backward integration, where India aims to reduce dependence on foreign suppliers for critical components like containers and shipping lines.